Do it right the first time! Why core documents are important.

A number of years ago during a partnership dissolution hearing in Baldwin County, the trial Judge became increasingly agitated as issue after issue being raised in his court had not been addressed in the quite lengthy partnership agreement that had been drafted for the partners several years before. I was thankful that I was not the draftsman of that particular agreement.

Finally, as he decided that he’d had enough for the moment, the Judge looked up and said “Ladies, if you ever do this again, and I’m hoping you don’t, do it right the first time!”

Moving forward about a dozen years, I have a client that is embarking on what I think is going to be a successful venture into the area of employee leasing, or PEO (Professional Employer Organization). It has been an absolute pleasure to create the LLC, review and revise its documentation and consult and advise on various issues facing the company. All of this before the first employee is placed.

Not every contingency can be anticipated in the operation of a company, but a number of large issues can be addressed through proper contract language. For instance, the original proposed MSA (Master Services Agreement) contained some rather broad indemnification language that had been carried over from previous versions of the MSA that had been used in the industry. Why? Because that’s the way they’d always done it before.

The current MSA contains no such language. Clients desiring that sort of indemnification may negotiate the issue on a case by case basis.

I would urge every business owner to have their core documents reviewed from time to time by an attorney that is knowledgeable in that area. Don’t wait until you have to figure a way out of the hazards that may be lurking in your contracts. Although not every possible scenario can be anticipated, the money you will spend is an investment in avoiding problems down the road.